Last-minute shoppers headed to the nation's stores and malls on the day before Christmas, looking for the final items they needed and searching for good deals but for retailers, the season was essentially over long ago.

Grim seemed an understatement for the retail sector on Friday, as J.C. Penney Co. and Abercrombie & Fitch Co. both posted quarterly profits that fell by about half, and gave outlooks for the rest of the year that were far below Wall street expectations.

Wal-Mart officials sounded an upbeat tone for the holidays as the retailer posted a 10 percent increase in third-quarter profits on Thursday, saying that shoppers are responding to its early Christmas promotions.

After enduring the weakest October in at least 39 years, retailers are set to slash prices even more to pull in consumers who went into full retreat last month. That's darkening the outlook for the holiday season, which was already grim.

American consumers went into hiding in September, leaving retailers with dismal sales and an uncertain future well beyond the holiday season as the fallout from the financial meltdown pushes spending even lower.

The weak retail sales merchants had been expected to post for September will likely prove to have been a disaster as the financial meltdown that began halfway through the month sent shoppers into hiding.

When it came to buying their children new jeans and trendy tops, parents held the line: They focused on basics at discounters and waited for the best deals, resulting in weak August sales at many stores. That's a bad sign for the holiday season as families may be just as cautious with their gift-giving.